Sabtu, Oktober 27, 2012

OUR OIL FIELDS ARE RUNNING DRY?

25/10/2012: PETRONAS recently came up with some very lame excuses including the diminishing assets and/or maturing fields’ arguments to hoodwink the people of East Malaysia (Sabah and Sarawak). For many decades now East Malaysians have been treated like fools and simpletons to believe that our oil fields are running dry.

With new technology especially in exploration and drilling, our potential oil reserves are a lot more than we are being made to believe.

Shell had been in existence in Borneo since they discovered their first oil well in Miri, the Grand Old Lady, in 1910. For decades, Shell had been extracting oil and gas from land fields to offshore fields all over Borneo.

Many foreign petroleum companies continue to exploit and explore the rich petroleum natural resources of Borneo to the deep waters in the South China Sea. With the decades of exploitation and production, the Royal Dutch Shell grew over the years to become a giant as the No.1 Fortune Global 500 companies in the world with an asset value of US$345 billion and 2011 total revenue of US$485 billion and profit of US$31 billion.

Shell continues to exist until today making Miri its regional headquarters for Asia/Pacific – more than a century since its first oil well in the world.

One day, the Malaysian politicians got smart and came up with the Petroleum Act 1974 that gave birth to Petronas – an Act of Parliament that nationalized the petroleum assets of Malaysia.

By this act, all petroleum companies operating in Malaysia became Production Sharing Contractors (PSC) that limits their extraction of petroleum resources after discovery with certain terms and conditions.

By the Petroleum Act 1974, Petronas equipped with the PSC picked up step by step from Shell from the Baram Delta to Semarang and all other fields throughout Sabah and Sarawak. Shell, without the petroleum rich assets, gradually scaled down the workforce and maintained only their essential and core employees. Shell finally decided to sell and demolish the small refinery in Miri.

From 1974, Petronas grew to become another giant product of East Malaysia – the No. 68 Forture Global 500 companies in the world with an asset value of about RM500 billion and 2012 total revenues of US$97 billion and profits of US$22 billion. Petronas grew from strength to strength over the years.

At one time, Petronas Twin Tower proudly held the Guiness Book of Record’s tallest twin tower in the world. Today, Petronas is in the Formula 1 Grand Prix calendar and is an international brand name. There are numerous more mentions and accolades of Petronas nationally and internationally.

The making of Royal Dutch Shell and Petronas from our petroleum resources sounds fantastic. Even though Petronas has been making profits for decades now, Sabah and Sarawak do not have RM500 billion worth of 'bacon' in reserves to be proud of unlike Petronas assets.

Even though Sabah and Sarawak accounted for 80 percent of the Malaysia’s petroleum production that contributes to 40 percent of the Federal Government annual revenue and I am not even talking about other resources such as oil palm and timber, shamefully, Sabah is the poorest state in Malaysia.

Brunei is pale in comparison to Sabah and Sarawak but Brunei has no foreign debt and the Brunei $1.00 is equal to RM2.50+. In the 70’s B$1 equaled M$1.00. Brunei is wise enough to invest and get valuable returns from the petroleum money and be able to provide their citizens with many goodies that Sabahans may not have heard of or let alone expect.

Our crude oil is ‘light sweet crude oil’ which is of a higher grade than crude oil extracted from Middle East countries which are ‘heavy sour crude’ due to their high sulphur content. With the revenue we are getting from our oil and gas Sabahans should not have to pay income tax just like the citizens of Brunei, and our youths should not have to fight for a place and pay for their higher education.

Education should be free for all Sabahans! With the revenue we are getting from our oil and gas, Petronas twin tower should have been located in Kota Kinabalu (not that we need it. We do not need props to boost our ego or lack of self confidence as we already know that we are as good and as capable as anybody)

After more than a century of explorations, exploitations, development and extractions of our valuable petroleum resources in East Malaysia, where do all these leave us? Who can be held accountable for the “petroleum resources drain” from our fields? As it stands now we won’t even be able to ‘smell’ the oil before it is piped to Bintulu for refining. Why are the refineries not built in Sabah? What can we expect from now on into the future?

Those and many more questions arise for the special committee appointed by Prime Minister Najib to study the issue before submitting its proposal to the Federal Government. Najib only targeted the study for the eastern states of West Malaysia (Terengganu and Kelantan) as if its an “election lip service” because it was announced so close to the 13th General Election.

In fairness, Sarawak and Sabah Chief Ministers jumped in at the right time to ask to be included in the study. Otherwise, for decades now, nothing has been done more about the 5 percent royalty. To-date, it has never been officially and publicly announced how the 5 percent royalty is derived and accounted for from the actual production and accounting.

The people of Sabah and Sarawak do not know what happened to the 5 percent that we get from the petroleum revenue from Petronas and/or the Federal Government. From the figures obtained from the internet, 5% of the net revenue amounts to about 1.10 billion ringgit.

The other question for Sabah is, “Why does the government decide to spend billions to install a pipeline to Bintulu a distance of some 500km?” Is there insufficient land to build a refinery and storage tanks for petroleum in Sabah?

Why is there no refinery in East Malaysia as two of the biggest petroleum producing states of Malaysia when a small refinery in Miri was sold and demolished by Shell? What justifications are there to build refineries and petro-chemical plants in Johor, Melaka and Negeri Sembilan which do not produce petroleum?

For East Malaysian, how can Petronas continue to bully us into accepting their lame explanations that the fields are depleting, maturing and other excuses only fit for kids (after more than a century Shell is here to stay and is still making money)? It is now time for the people of Sabah and Sarawak to stand firm and not accept any excuses and vie for change.

They kept taking away all our precious resources (petroleum, timber, oil palm, et cetera) and gave us back pittance. For example, elections after elections for almost half a century we heard about the Pan Borneo Highway to link Sabah and Sarawak but still until today we have to drive patiently through Brunei as if our patience will last forever, not to mention the deplorable condition of the ‘highway’ to Kudat.

When the World Bank last year reported that we are among the poorest of Malaysia states, within months they said we have recovered as if “Rome was built in one day”.Our petroleum resources are valuable; and so are our votes for the 13th General Election.